晶科能源 (JKS) 2012 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the JinkoSolar Holding 2012 Fourth Quarter Earnings Conference Call.

At this time, all participants are in a listen-only mode.

There will be a presentation, followed by question and answer session.

(Operator Instructions)

I must advise you that this conference is being recorded today, Wednesday, 10th of April 2013.

I would now like to hand the conference over to JinkoSolar Investor Relations Director, Mr. Sebastian Liu.

Thank you.

Please go ahead.

Thank you, Operator.

Thank you, everyone, for joining us today for JinkoSolar's fourth quarter and 2012 earnings conference call.

The Company's results were released earlier today and available on the Company's IR website at www.jinkosolar.com, as well as on the newswire services.

We have also provided a supplement to the presentation for today's earnings call, which can also be found on IR website.

On the call today, from JinkoSolar, are Mr. Chen Kangping, Chief Executive Officer, Mr. Herrero -- Arturo Herrero, Chief Marketing Officer, and Mr. Zhang Longgen, Chief Financial Officer.

Mr. Chen will discuss Jinko's business operations and the Company's highlights, followed by Mr. Herrero, who will talk about the Company's business strategies, and then, Mr. Zhang will go through the financials and guidance.

They will all be available to answer your questions during the Q&A session that follows.

Please be note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the US Private Security Litigation Reform Act of 1995.

Forward-looking statements involve inherent risks and uncertainties.

As such, our future results may be materially different from the views expressed today.

Further information regarding this and other risks is included in Jinko's public filings with the Securities and Exchange Commission.

Jinko does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please be note that to supplement its consolidated financial results presented in accordance with United States generally accepted accounting principles of GAAP, JinkoSolar uses certain non-GAAP financial measures.

The Company believes that the use of non-GAAP information is useful for analysts and investors to evaluate Jinko's current and future performances based on a more meaningful comparison of the net income and diluted net income per ADS when compared with its peers and historical results from prior periods.

These measures are not intended to represent or substitute numbers as measured under GAAP.

The submission of non-GAAP numbers is voluntary and should be reviewed together with GAAP results.

It is now my pleasure to introduce Mr. Chen Kangping, CEO of JinkoSolar.

Mr. Chen will speak in Mandarin, and I will translate his comments into English.

Please go ahead, Mr. Chen.

(interpreted) Thank you, Sebastian.

Good morning and good evening to everyone, and thank you for joining us today.

Our business continued to face significant challenges during the fourth quarter, due to continued module oversupply and the economic uncertainties lingering over the global economy.

Despite these challenges, I'm encouraged by the progress we have made in reducing our costs and expanding our geographical reach.

We were able to maintain positive gross margins while shipping a record high of 1,188.3 megawatts during 2012, of which 912.4 megawatts were solar modules, an increase of 25%, year over year.

Total shipment during the fourth quarter itself was 301.9 megawatts, representing a year over year increase of 33% from 227 megawatts during the same period of -- in 2011, of which 252.3 megawatts were solar modules.

Total revenues during the quarter were $187.3 million, a 2.6% decrease from the same period last year.

This was during a [well] unsettled global solar industry, especially given the recent developments.

I believe that these results demonstrate that the effectiveness of our strategy and the commitment to adapt to this different environments and conditions of our diversified markets and locations.

We are extremely optimistic as we look ahead, given our focus on our [recordedness] and our challenged financials and operational strengths.

During the quarter, our working capital and cash reserves continue to improve as we continue to achieve positive operating cash flow.

Our balance sheet was in further -- fortified with the addition of RMB800 million we issued in corporate bonds in February 2013, and we're very proud of the fact that JinkoSolar is the only Chinese solar company to have successfully issued the corporate bonds in 2013 so far.

This reflects the strong confidence in the marketplaces in our long-term potential and sustainable business developments.

In addition to our improved cash position, our advanced technology, high quality, and reputation as a reliable partner has allowed us to create even stronger relationship with our customer around the globe and, very importantly, attract repeat business.

Our brand image continued to improve, along with the quality of our products and services.

We recently launched the world's first potential induced degradation free modules to be certified under the weather condition of 85 degrees Centigrade and 85% relative humidity.

The Eagle series, as they are known, represents a new standard that Jinko is setting for high performance and reliability in the market.

This continuously improving brand image allow us to post strong sales during the quarter, which brought inventory levels down to an industry low of $85 million, a sequential decrease of approximately $50 million.

We now have more than 160 customers and are active in 20 countries, which is truly a testament to the increasing global appeal of our brand.

With Europe continue to struggle, our global presence expanded as we diversified risk and seek out new opportunities in emerging solar markets, such as China, Japan, the United States, South Africa, and India.

With more than 100 megawatts worth of shipments to Japan already signed and 60 megawatt more for India, we're excited about the opportunity the -- we'll present as we begin to seriously compete for business.

While we entered the Japanese market relatively late, we have already built a considerable market presence since our Japanese office opened early last month.

Despite the circumstances in the United States, we remain fully committed to our customers there, and we anticipate that the US market will account for a large portion of our growth in the coming year.

South Africa has been approved to be a significant market for us, too.

The signing of two large contract, especially the 115 megawatts contract signed last week, has demonstrated that the growth of our reputation is at critical markets.

Our ability to compete for business overseas was boosted in December when we signed a $1 billion strategic cooperation agreement with China Development Bank, which will provide us additional financial power and flexibility to finance our oversea projects.

We intend on using this financial platform to create high quality PV projects and an excellent return on investment because of growth.

China continues to provide increasing opportunities for our project development and EPC business, as well as the module sales.

Having been one of the first solar companies to foresee China's potential, we have managed to secure multiple contracts, repeat business, and project development initiatives.

This has allowed us to quickly become one of the most well-known PV module brands in China.

Our project development and EPC business pipeline is also showing increasing strengths, with multiple projects and most with China already continued to the national grid or under construction.

And now a demonstration of our abilities to secure repeat business came with 600 megawatts contract we signed with China Three Gorges New Energy Corporation.

The investments we have made in our relationships with Chinese state-owned enterprises have proven successful with the quality, reliability, and a scale of our most average energy project and distributed system in China, we are well positioned to capture future growth.

In conclusion, I'm extremely optimistic as we look ahead, given our current financial and operational strengths.

We believe that the global solar market, after years of oversupply, has finally begun to recover, and we expect global demand to increase sustainably from 2013, onward, and we're confident that our long-term growth prospects with further strengths, as our strong client relationships and reputation will bring us new and exciting business opportunities.

We plan to continue to manage our business prudently and leverage our industry leading technology and cost structure, along with the -- our improved financial position to seize market opportunities, especially repeat business, and drive future growth.

For the first quarter of 2013, we expect total solar module shipments to be approximately 270 megawatts to 300 megawatts.

Full year 2013 total module shipments are expected to be in the range of 1.2 gigawatts to 1.5 gigawatts, and total project development scale is expected to be in the range of 200 megawatts to 300 megawatts.

The Company expects that its in-house annual silicon wafer, solar cell, and solar module production capacity will remain at approximately 1.2 gigawatts each by the end of 2013.

Arturo Herrero, our Chief Marketing Officer, will now discuss our major achievements in sales and marketing for the fourth quarter in further detail, as well as our strategy in the market outlook for the fourth quarter in key countries and regions.

Thank you, Mr. Chen.

Good morning and good evening to all of you.

Demand in Q4 continued to be negatively impacted by weak economic and financial conditions in several traditionally important markets.

ASP remained depressed as a result of fierce competition, exacerbated by persistent oversupply in line with market trends, as we prevailed throughout 2011 and 2012.

Despite these challenges, our shipments for the year were higher than the year before, and also, all-time record for JinkoSolar.

So far, in 2013, we have seen very strong and consistent demand, and we expect high potential for this year and the next year, 2014.

Our shipments in 2012 reached almost 1.2 gigawatts.

That represents 25% increase over the year before.

Total shipments during the fourth quarter itself were 321 megawatts, a year over year increase of 33% from the previous 227 megawatts.

Gross margin, also in Q4, was positive; over 3% compared to negative gross margin the year before.

Total gross margin for the year was positive, reaching almost 5%.

Higher achievement in 2012 resulted primarily from a strong growth in China during the second half of the year, while demand from Germany, France, and Spain remained stable, and Italy came in lower than expected, due to a cut in the feed-in tariffs and uncertainties in the [relation] system.

The most important achievement in our sales has been the good progress made in geographical diversification, entering it strongly in new emerging solar markets.

Besides China, we saw good progress, compared to the year before, in India, Canada, and Japan, even though some contracts and shipments to India, South Africa, and Japan were delayed to Q1 this year, 2013.

In the USA and Australia, we doubled our megawatt shipments from the year before, despite the challenges, and thanks to our consistency of strategy in this huge potential market.

In Q4, Europe accounted for only 33% of the shipments compared to 50% in the first quarter 2012.

As expected, Europe proved to be down during the second half of the year, as a result of their reductions in the feed-in tariff and the cancellation of subsidies in some major markets.

We continue both to expand our customer portfolio and increase customer quality.

In Q4, we had over 160 customers in 20 different countries, up from 150 in the same number of countries in the previous quarter.

Concentration risk continues to come down.

In the last two quarters, our top 15 customers accounted roughly for 60% of our sales, down from 80% at the beginning of the year in Q1 2012.

The good news is that we have happily experienced in these few months of 2013 every positive change in the market trend.

We have much better visibility, contracts lasting several quarters, and we expect a rebound on the ASP.

This is due to our improvements in brand recognition, bankability, and local presence in new emerging solar markets.

In Europe, as many European governments continue to retreat from subsidies and bank financing remains tight, we have continued to partially transition from larger scale projects to residential installations, increasing our focus to new solar market.

Our strategic focus in China over the past quarters has continued to pay off as our domestic shipments reached record volume and is expected to remain strong during the year 2013.

Regarding other emerging markets, we have seen very good results of our efforts in markets like South Africa, India, Australia, Canada, and Japan.

In South Africa, as previously announced, we have been selected for several projects in the first and second round of the public tender for PV solar larger scale projects.

For our first project, the largest to date in the African continent, with a size of 81 megawatts, we have already started monthly shipments of 9 megawatts for the next coming nine months.

We also announced another big contract for 115 megawatts for two different projects in the same country, South Africa.

It was -- corresponds to a second round of the public tender.

These shipments will start in the second half of 2013 and will last for ten months, for 20 megawatts monthly, approximately.

In India, we already shipped over 50 megawatts in the first quarter 2013, and we are entering into new contracts for the second half.

The Japanese market has also been promising, due to the important support from the government for select energy projects.

We have signed already a 100 megawatt project for the year 2013, and we already start the shipments.

Latin America remains appealing, if only a bit slower than expected.

We continue to see reasonable growth that we expect to start materializing in the second half of the year in countries like Chile, Brazil, and Mexico.

In line with our prudent and focused expansions and diversification strategy, we continue to strengthen our global sales and marketing teams, while closely controlling our cost and our budget.

We are especially reinforcing our presence in the Asia-Pacific, South African, and South American markets.

Our market share continues to grow.

In 2012, we reached 3.5% in the major 15 PV countries, and we remain top six worldwide crystalline module producer, according to the AMS Research Institute.

Regarding marketing, we're getting very consistent in our strategy, and we have achieved our goal of broadening our brand definition around the world, particularly in the various important markets, not only in Europe, but Asia-Pacific, Africa, and the USA.

At the same time, we have been spending less than our peers.

Regarding the sponsorships, Valencia has been taking a big part of our budget and has been competing successfully in the European champions club against all the European football clubs, and they will playing against Barcelona Football Club in Shanghai this coming summer.

Regarding 49ers, San Francisco, they also played the Super Bowl in the USA.

During the fourth quarter, we participated in five PV exhibitions in Asia-Pacific, five in Europe, and two in the USA.

These exhibitions include PV Japan, All-Energy in Australia, IGEM in Malaysia, Solar Power in UK, Romania, in France, and Toronto in Canada.

We also attended PV conference in San Diego and [Greentech Media] in the USA, solar summit in Cape Town, South Africa, and [Solarplaza], where we were having the opportunity to do speaking opportunities in Milan, Italy, and in Chile.

Consistent with our focus on corporate social responsibilities, we made several donations of PV modules to multiple prestigious events and institutions, such Rock No War event that was happening in San Francisco during the last quarter of last year.

We will also attending PV major exhibitions in the next coming months, as we used to do with our marketing budget.

More than 80 customers have already registered in our Jinko VIP program called Priority Solar Club that is focusing on its strategical partners.

We're seeing great interest for our Eagle series -- PID free series that is becoming tested with 85 degrees Celsius and 85% humidity.

It is a PV module designed specifically for high temperatures and high humidity environments typical for countries in India, Africa, and South America.

In our communication and PR, we are consistent being trustful, as our slogan is saying, building your trust in solar.

Thank you very much.

Good morning and good evening to everyone on the call.

First, I would like to walk you through our financial results for the fourth quarter of 2012, followed by full year results and the first quarter and the full year 2013 guidance.

I would like to start by pointing to the revised third quarter 2012 figures that will be used on the call today.

Sales contracts in China, typically -- differ from those used in other international markets, as they incorporate (inaudible) terms.

Jinko customers in China are allowed to withhold payment of 5% to 10% of the full contract price as a retainage for the entire duration of the contract, which, typically, ranges from one year to two years.

Given that the Company recognized most of its revenue from China during the third quarter and the fourth quarters of 2012, Jinko has limited experience with respect to the collectability of the retainage of the contract.

Taking a conservative approach and after consultation with our auditors, we decided to defer the revenue recognition of the retainage until we are fully paid by the customer.

As a result, Jinko has restated its third quarter 2012 figures.

Moving on, total solar product shipments in the fourth quarter of 2012 were 301.9 megawatts.

Total revenues in the fourth quarter of 2012 were RMB1.17 billion, a decrease of 12.2%, sequentially, from RMB1.33 billion and a decrease of 2.6%, year over year, from RMB1.2 billion.

The sequential decrease was primarily due to the industry wide decline in ASPs of solar products and a decrease in solar modules sold.

Gross margin was positive 3.8% in the fourth quarter of 2012 compared with positive 5.8% in the third quarter of 2012 and a negative 4.4% during the same period of last year.

In-house gross margin relating to in-house silicon wafer, solar cell, and solar module production was 5.6% in the fourth quarter of 2012 compared with 8.3% in the third quarter of 2012 and 5.8% in the fourth quarter of 2011.

Loss from operations in the fourth quarter of 2012 was RMB733.7 million compared with loss from operating -- operations of RMB111.3 million in the third quarter of 2012 and a loss from operations of RMB316.1 million during the same period of last year.

The Company's total operating expenses in the fourth quarter of 2012 were RMB777.3 million (sic -- see press release), representing an increase of 311.7%, sequentially, from RMB188.9 million and an increase of 194.8%, year over year, from RMB263.8 million.

During the fourth quarter of 2012, the Company recognized a provision for bad debts of RMB364.1 million and recorded a -- and a recorded it as general and administrative expenses.

In addition, the Company recognized an impairment of long-lived assets for obsolete production lines of RMB65.5 million due to the continuing technology innovation in the solar industry.

Total operating expenses excluding noncash change -- charges, consisting of provision for bad debts, an impairment of long-lived assets, a write-off for equipment prepayment, and a provision for inventory purchase prepayment under long-term contracts was RMB210.7 million during the fourth quarter of 2012.

These compares with RMB177.2 million in the third quarter of 2012 and RMB218.2 million in the fourth quarter of 2011.

Operating margin in the fourth quarter of 2012 was negative 62.9% compared with negative 8.4% in the third quarter of 2012 and a negative 26.4% during the same period of last year.

Net interest expenses in the fourth quarter of 2012 was RMB56.3 million, an increase of 8.8%, sequentially, from RMB51.8 million and an increase of 6.1%, year over year, from RMB53.1 million.

We recorded a foreign exchange -- currency exchange gain of RMB59.7 million in the fourth quarter of 2012, primarily due to the foreign currency exchange gain of RMB9.7 million and a gain in fair value of forward contracts of RMB50 million.

We recognized a loss of RMB68.7 million in change of fair value of convertible senior notes and a capped call option during the fourth quarter of 2012.

The Company recognized an income tax in the fourth quarter of 2012 of approximately RMB83,000 compared with a tax expenses of RMB1.3 million from third quarter of 2012 and a tax gain of RMB18 million in the fourth quarter of last year.

Net loss in the fourth quarter of 2012 was RMB761.1 million compared with a net loss of RMB114.5 million in the third quarter of 2012 and a net loss of RMB366.6 million in the fourth quarter of 2011.

This translates into a basic and diluted loss per ADS of RMB34.32 and $5.51.

Non-GAAP net loss in the fourth quarter of 2012 was RMB699.5 million compared with non-GAAP, a net loss of RMB87.6 million in the third quarter of 2012 and a non-GAAP net loss of RMB370.8 million in the fourth quarter of 2011.

This translates into a non-GAAP basic and diluted per ADS of RMB31.52 or $5.06.

Now, I will briefly review our full year 2012 financial results.

Total revenues for the full year 2012 were RMB4.79 billion, a decrease of 35.1% from RMB7.38 billion in 2011.

Loss from operations for the full year 2012 was RMB1.23 billion compared with an income from operations of RMB315.9 million in the full year 2011.

Operating margin for the full year 2012 was negative 25.7% compared with positive 4.3% in the full year 2011.

Total operating expenses in 2012 were RMB1.47 billion, an increase 75.8% from RMB834 million in 2011.

Operating expenses represented 30.6% of total revenues for the full year 2012 compared to 11.3% for the full year 2011.

The Company recognized a tax benefit of RMB8.9 million for the full year of 2012 compared to a tax expense of RMB81.1 million in 2011.

Net loss in the full year 2012 wasRMB1.54 billion compared with a net income of RMB273.3 million in 2011.

This translates into a basic diluted loss per ADS of RMB69.52 or $11.16 in 2012.

Non-GAAP net loss in 2012 was RMB1.42 billion compared with non-GAAP net income of RMB4.4 million in 2011.

This translate into non-GAAP basic and diluted loss per ADS of RMB63.76 or $10.23 in 2012.

We would now like to take a quick look at our balance sheet.

As of December 31, 2012, the Company had $67.4 million in cash and cash equivalents and restricted cash.

As of December 31, 2012, total short-term borrowings, including the current portion of long-term banking borrowings, were RMB2.24 billion (sic -- see press release) compared with RMB2.2 billion as of December 31, 2011.

Total long-term borrowings were RMB167 million as of December 31, 2012, compared with RMB155.5 million as of December 31, 2011.

Now, let me turn to our guidance.

For the first quarter of 2013, we expect total solar module shipments to be approximately 270 megawatts to 300 megawatts.

For the full year 2013, total solar module shipments are expected to be between 1.2 gigawatts and 1.5 gigawatts, and total project development scale is expected to be between 200 megawatts and 300 megawatts.

We expect to maintain our in-house annual silicon wafer, solar cell, and solar module production capacity at approximately still 1.2 megawatts -- 1.2 gigawatts each by the end of 2013.

At this moment, we are happy to answer -- to take your questions.

Operator?

Thank you very much.

Ladies and gentlemen, we will now begin the question and answer session.

(Operator Instructions).

Satya Kumar, Credit Suisse.

Hey, this is [Brandon Heiken], speaking on behalf of Satya Kumar.

Thanks, guys, for taking the question.

I was wondering if you could talk about your expectations for future cost reductions.

I know you guys have done a great job in reducing costs thus far, so, congratulations on the $0.54 for the fourth quarter.

I -- could you talk about what you expect for 2013 for non-silicon costs?

I think, as you can see that our fourth quarter of 2012, we reduced our non-silicon costs down to $0.45, so the silicon cost only $0.09.

So, all total, total cost is $0.55.

We will continue in our -- I think, to reach the economic [five] and also, to influence technology.

So, we think, on a non-silicon cost, we continue in cutting down, and by the end of this year, from $0.45, maybe down to $0.40.

So we still have like two -- $0.05 -- $0.45 continue go down.

So, basically, if the silicon cost can stable around $20 to $25, so, we think, by the end of this year, the cost will -- the total cost will be around, I think, $0.52 to $0.53.

Okay, great.

Thanks.

And I was wondering -- it looks like -- with your full year guidance and with the projects, that you expect production to be well above the nameplate capacity.

If you're at the high end of that guidance, do you expect to outsource some production?

And is -- can you talk about outsourcing or any other strategies in the case of European tariffs?

To answer your first question, I think, yes, for the guidance, you can see that our shipments and -- plus our products -- our own products, [where use] module, I see more than our capacity.

Definitely, we will outsourcing our -- some capacity.

Meanwhile, we also looking for some surplus inventory.

I think capacity outside is cheaper right now; maybe only pay $0.01 -- $0.10, and you can get $1.00.

So we are all working on that.

Okay.

And then, in the case of European tariffs, what strategies do you think -- if that were to happen, what strategies would you --

This is Arturo Herrero, CMO.

I will answer very prudently here.

I think it still is -- is still under investigation, so we don't want to speculate at what is going to happen.

We are preparing for the worst scenario, and we have different options in our plan.

However, I still -- I am very -- quite optimistic in this regard.

I expect, personally, with my connections in the industry, that probably will be no feed-in tariff showing up.

No tax for the adopting] or it will be quite tiny.

But in case there is something happening, we will be more than happy to put in place one of the options that we have already been analyzing, and at that time, we will be announcing, in case we have to.

Thank you, guys.

You're welcome.

Thank you very much.

Philip Shen, Roth Capital Partners.

Good evening.

This is Matt on the line for Phil.

Thanks for taking my questions.

Just in touching on those retainage contracts you guys mentioned, how long can we expect these types of contracts to continue?

And also, could you give us a sense for what percentage of your customers were able to take advantage of these contracts?

I think the retainage contract, in China and most -- I think is not only the solar industry, but also the wind industry.

So, most the contracts you deal with SOE, state-owned company.

They always have retainage -- 5% to 10%, and the pay by the end of the contract.

So, usually, the one year, two years.

So, for us, because we didn't have any history experience.

We just starting.

You can see that the third quarter of last year.

So, basically, on that, you see, we pick our device from our -- I think we -- we take -- we consulting our auditors.

I think we very concerned -- I think we defer the -- those revenue, and on here, we track the cash.

Okay, thank you.

And then, one more, if I may, is a follow-up to what Brandon was asking on capacity.

It looks like you're using, sort of, outsourcing to make up for the deficit if you're on the higher end of the guidance there.

What conditions would you look for, though, before deciding to extend capacity in-house?

For example, would it be an amount of megawatts in the pipeline?

Is it visibility into demand over the next two years?

Could you give us a sense for how you think about that, please?

I think, maybe, let me answer you first; then, maybe, Arturo can -- to comment more.

Basically, we always looking for the opportunities; right now, the consolidation in China.

And every day, basically, we can see the restructuring is there.

So, the actual capacity is there, and the only thing is the negotiation.

How can we cheaper to invest little money, then got more high -- the capacity?

So, we always looking around.

We just waiting for the opportunities.

At this moment, you have to consider the EU anti-dumping issue; those come out.

So, if you look over outlying for 2013, the half of the year, actually, the sales in Europe -- we -- the percentage is not high yet, comparatively, with our market in China, Japan, and Africa.

So that's why we always watch the market.

At the beginning, we maybe -- it's easy for us to increase the capacity on the module side, but definitely -- if we going to expansion any cell and the wafer capacity, definitely, we will -- I think, we will not be the new facilities.

We maybe buy some existing China facilities.

Okay, thank you.

That's helpful.

I'll jump back in the queue.

Thank you very much.

[Hitish Barani], [Bishell and Company].

Hi.

Thanks for the call.

Can you throw some light on the effect of the [Suntech] bankruptcy on the business, if any?

I think -- Hitish, right?

I think it's a good question, because, today, in China, the solar industry, I think -- not only in the consolidation, but also is a space challenge, and the overcapacity is space challenged by the market demand.

And also, inside China, you can see our competitor -- one of competitor -- in Suntech, I think you can see that is going on restructuring.

So, all this, I think, definitely will affect the whole industry.

I think the government, right now, in the March, the new government still set up.

I think they are aware of the situation right now.

I think the governments will take, I think, two steps, I think.

One step is to increase the domestic demand to streamline the policy.

I think, also, to -- possible to increase the potential demand, especially, like, two steps -- I think subsidize in the eastern area of China, [as all] these policy, I think, will increase the demand.

Second, also, I think the governments put more attention to restructuring consolidation activities in that way -- all capacity issues.

So, as you can see that -- of course, today, I think everybody's solar company is face the banking -- I think, the law is [typing].

But we still think Jinko is one of the banking, I think, select to -- priority to support.

As you can see, we just got 50 megawatts our projects -- solar projects collateral loan -- RMB360 million from China Development Bank.

It's the first loans from China Development Bank.

So, definitely, I think we will continue working on that, I think, in this scenario and be survive and be the best one.

Let me add to Sam.

This is Arturo, CMO.

That, in the short-term, obviously, all the industry is impacted by this bad news for the industry.

However, we were expecting this consolidation, and in the long-term, it's good news for the survivals.

We believe that -- strongly believe that JinkoSolar is one of the companies will survive, and, in fact, we are seeing other customers coming to Jinko with our strong bankability.

We have over 56 banks already that has been providing financing to our modules for our customers in their project financing.

So, more and more customers are also very selective, which -- suppliers -- they are coming to us for technology.

So, this is good news for us in the mid, long-term.

Sure.

Thank you.

Thank you very much.

[James Madiver], Cowen and Company.

Good evening.

My question is about ASPs.

Are you able to disclose what your module, wafer, and cell ASPs were in the fourth quarter?

Yes.

I think, just to also point out, is, in fourth quarter, we sell a high product in China, so we also defer those retainage, I think, revenue until we collect it.

So, ASP is $0.57 total on the modules and $0.16 on the wafer and $0.27 on the cell.

And that would be net of the 5% to 10%, and the retainage applies to all three categories?

Excuse me.

The -- you mean the module?

Does the retainage -- the 5% to 10% retainage apply to all three categories?

Basically, just the module.

Just the module.

Okay.

Yes, yes.

Then, following up, how are ASPs trending for the -- this -- for Q1 of '13?

Let me add -- this is Arturo, the CMO.

Let me add an explanation of the ASPs.

But, because -- in order to compare apples to apples, we were discussing internally also with our Chairman.

The low ASP is depending not only on the price in the market, but the conditions of the logistics.

So, if it is not the same to the [CIF] conditions that [DVP] were normally that is around $0.02 to $0.03 higher in the price when you are using all the logistics with the goods in the sight of the customer.

The other thing that we are mainly producing polycrystalline modules.

So, we are not mainly selling monocrystalline.

That is much more cost intensive production, but also is sold at a higher price in the market, so it's influencing also the ASP.

And finally, it is also important to realize that we have been slightly late in some countries, like Japan, where we are very active right now, where ASP is higher, because, also, the conditions of the country in feed-in tariff is much better.

And we are selling out in China, where also the ASP is impacting in the [down].

So, overall, I think we have very -- we are comfortable with the current competition with our peers, but, at the same time, we expect our ASP to recover in order to get more profit.

Okay.

For the (inaudible) insufficient, we are in a [wrench] also.

We expect around six -- $0.57 to $0.60 per watt -- between $0.57 to $0.59.

And how might that look, exiting the year, against that $0.52 to $0.53 cost estimate?

Yes.

For the year, probably we will see a stability on the ASPs, and also, for Jinko, we expect it slightly recovering until Q3, because we have a very good visibility this year, in terms of orders and contracts.

And probably, in Q4, it will be slightly reduction, as every year is happening with the winter season.

Okay, thank you.

Very helpful.

You're welcome.

Thank you, Jim.

So, thank you, everyone, for --

Thank you very much.

(Operator Instructions).

Since there is no more question at this time, I would now like to hand the conference back to Sebastian for closing remarks.

All right.

So, thank you, everyone, for joining us today, and if you need more information, including the supplemental presentation of today's conference call, you can always find them on the Company's IR website at www.jinkosolar.com, and thank you again.

Bye-bye.

Ladies and gentlemen, that does conclude the conference for today.

Thank you for participating.

You may all disconnect.